Obama’s tax plans would devastate small businesses

Friday concludes National Small Business Week, an annual celebration by the Small Business Administration. Held here in our nation’s capital, the week brought together thousands of entrepreneurs from across our country to highlight small-business successes and share best practices.

This year alone, we’ve witnessed several acts of heroism. U.S. Airways Capt. Chesley Sullenberger, known as Sully, saved 155 passengers in a textbook emergency landing in New York’s Hudson River. And one cannot forget the bravery of Capt. Richard Phillips, who was held hostage by Somalia pirates on a lifeboat for five days and then freed after U.S. Navy snipers shot and killed his captors.

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The list could continue. However, there are never enough spotlights to shine on those who are the daily heroes in the survival of our economy, small-business men and women. These heroes are the ones who drive the economy, provide jobs for our families and are the essence of the American dream. There is no stronger spirit in the air than when you are in a room full of entrepreneurs. It’s inspiring, motivating and exactly what we have seen this week in Washington.

Yet, the message the Obama administration is sending to the SBA conference attendees hardly recognizes their bravery in entrepreneurship. Since President Obama took office, he has lagged in efforts to help the small-business community. Sixty percent of small-business owners think the Obama administration is out of touch, according to a recent City Business Journal survey.

The attacks on small business began with President Obama’s proposal to increase taxes to pay for his budget that spends too much, taxes too much and borrows too much. Many small-business owners file as individuals and will be hit hard by the president’s marginal tax rate increases.

According to the non-partisan Joint Committee on Taxation, the president would tax $88 billion of net positive business income ata a rate of 36 percent and $349 billion at 39.6 percent. The joint committee also projects that about 750,000 taxpayers with small-business profits are likely to face the higher tax.

Time and time again I hear from small-business owners who, even though they may file a tax return with $200,000, are not taking that amount home. Most are using those dollars to reinvest in their company or buy equipment. Taking money out of their pockets is not the solution to helping these owners succeed. Forty-eight percent of small businesses said recently that they are already in a hiring freeze, and 30 percent are no longer taking a salary. Why would we raise their taxes and hinder their chances for survival?

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Next, President Obama continues to harm business in his recent announcement to impose more taxes on U.S. companies with foreign subsidiaries. The U.S. already has the second-highest corporate tax rate in the world. But I suppose the president is aiming for first place by double-taxing U.S. corporations and putting them at a further disadvantage with foreign competitors. His idea would further tilt the playing field for American companies and is merely a scheme to raise revenue for his bigger government spending sprees. In 2007, U.S. multinational companies employed 22 million workers in the U.S. We need healthy businesses to continue to create more of these jobs.

Finally, President Obama’s new energy tax proposal has been under consideration this week in Congress as part of Reps. Henry Waxman (D-Calif.) and Edward Markey’s (D-Mass.) energy legislation. It is estimated to raise a household’s energy bill by $1,000 annually. This national energy tax, or “cap and trade” legislation, will have a devastating impact on the U.S. economy at the expense of small business. Estimates from the Heritage Foundation show this energy tax could cost almost 1 million jobs. Furthermore, raising energy costs would be an enormous burden on many home-based businesses.

As Congress adjourns for the Memorial Day recess, I encourage all my colleagues to take note of the heroic entrepreneurs in their districts while they are home. Recognize and thank our entrepreneurs for the chances they take and for making our nation’s economy stronger each and every day.

President Obama’s plans would devastate small businesses. We in Congress should focus on our small companies that create seven out of every 10 new jobs and keep the economy moving forward.